California has adopted regulations requiring new motor vehicles to reduce emissions of greenhouse gases (GHGs), beginning in model year 2009. The Clean Air Act, however, generally preempts states from adopting their own emission standards for mobile sources of air pollution. In order for the regulations to go into effect, therefore, the state must obtain a waiver of the Clean Air Act's preemption from the U.S. Environmental Protection Agency. California requested this waiver on December 21, 2005, but EPA has yet to rule on the state's request, in part because it was waiting for the Supreme Court to decide whether greenhouse gases could be considered air pollutants under the Clean Air Act, and thus subject to EPA's regulatory authority. With that case (Massachusetts v. EPA) decided April 2, 2007, EPA held two public hearings on the California waiver request in late May, and has promised a decision on the waiver by the end of 2007. The agency is under pressure to act more quickly. The state has threatened to sue EPA if a decision is not announced by October, and Florida's Senator Nelson has submitted legislation (S. 1785) to require a decision no later than September 30. Fourteen other states have adopted California's GHG regulations. Their regulations cannot go into effect unless California is first granted a waiver, so there is broader interest and more at stake than might otherwise be the case. This report reviews the nature of California's, EPA's, and other states' authority to regulate emissions from mobile sources, discusses the applicability of that authority to greenhouse gases, and provides analysis of issues related to the California waiver request. The conditions for granting or denying a waiver request under the Clean Air Act establish four tests: whether the standards will be at least as protective of public health and welfare as applicable federal standards; whether the state's determination in this regard is arbitrary and capricious; whether the state needs such standards to meet compelling and extraordinary conditions; and whether the standards and accompanying enforcement procedures are consistent with section 202(a) of the Clean Air Act. California appears to have a strong case that it has met these tests. This report does not discuss the issue of whether California is prohibited from regulating greenhouse gases by the Corporate Average Fuel Economy (CAFE) requirements of the Energy Policy and Conservation Act of 1975 (EPCA). Under EPCA, the authority to set fuel economy standards is reserved for the federal government, and specifically, the National Highway Traffic Safety Administration. In several court cases (not yet decided), and in other venues, the auto industry has maintained that the regulation of greenhouse gases is simply another method of regulating fuel economy, and, therefore, that California's GHG standards are preempted by EPCA. Detailed discussion of this issue is beyond the scope of this report.